Bids squelched

Contrary to an announcement last summer, the state contract to provide online services will not be awarded by competitive bidding this year. Instead, the state will negotiate another contract with the same private company that has held the contract — without competitive bids — since the on-line services program began in 1997.

The reason for the reversal is not entirely clear. Peggy Gram, chairman of the state Information Network of Arkansas, said that when she told a reporter last year that the contract would be put up for bids, she believed that she'd been so advised by the state purchasing office, which oversees the awarding of state contracts. Now, Gram says she was recently told by the purchasing office that it had decided the sole-source contract was good for Arkansas, and that other companies couldn't match the services provided by Arkansas Information Consortium, the contract-holder.

Jane Benton, director of state procurement, said that after studying the contract, her office decided that changing to a different company would create many problems, technical and otherwise. The problem of having dual systems for a time was one consideration, she said. “You can't shut one down today and bring up another one tomorrow.”

The purchasing office decided it needed more information before it could put the contract up for bids, she said. She said it was still possible that the state would solicit bids on the contract at some time in the future. Asked why the INA Board approved competitive bids last year, Benton said she didn't know, that she wasn't involved in that decision.

Gram said she'd thought the contract would be bid competitively, “because that's what the state purchasing office had told us to do. Now they've changed their minds.”

Some potential competitors of AIC have in the past wanted competitive bidding for the contract.

AIC set up the state website and on-line services program for free, and the state still pays nothing. AIC makes its money by charging user fees for certain services, such as inspecting drivers' records, and filing corporate records. The amount AIC makes from these fees is not a matter of public record. The attorney general's office has said that disclosure of AIC's profits would give its rivals an unfair competitive advantage. AIC has offices in Little Rock, but it's a subsidiary of a Kansas company that has similar contracts with many state and local governments.

INA is a hybrid group, made up of representatives of public and private agencies. Its job is “to improve the accessibility of Government in the form of public information or electronic transactions.” Gram, the chairman, is an employee of the secretary of state's office.